The Government has made an enhanced offer to resolve the public sector pensions dispute, but unions are continuing to plan for strike action on 30 November.
The new proposals include improved transitional protections for those closest to retirement and increased accrual rates within the major public service schemes compared to their previous position. There would also be a long-term commitment to any agreed reforms not being reopened within the next 25 years.
In responding to the new offer unions pointed out that workers were being asked to pay 50% more into their pension but they will receive a 25% cut in what they will be paid out. The unions also disputed Treasury’s claims that public sector workers on low or middle incomes would be better off as the proposals would see them being asked to work eight years longer.
The proposals provide for workers to pay 3.2% more in annual contributions phased in between 2012 and 2014. Workers earning less than £15,000 would not face any increase and those on less than £18,000 would see contributions capped at 1.5%
Pensions will be changed from a final-salary basis to a payout based on average pay over workers’ careers from 2015. In addition people will have to work for longer before collecting their pension as the state pension age for men and women will rise to 66 in 2020.
The TUC’s Public Services Liaison Group will meet later in the month to consider the Government’s enhanced offer, but in the meantime planning for strike action at the end of the month will continue.